Things That Can Go Wrong In Underwriting When Buying A House
Posted on: 2 April 2019
One of the steps you must take when buying a house will involve the process of underwriting. Underwriting is something that all lenders perform when issuing loans to people for homes, and the underwriters for your loan will work hard to ensure that you meet the requirements to get a loan. During this process, there are a variety of things that can go wrong that may stop you from being able to go through with the purchase of the home you want to buy, including some of the following points.
Problems verifying income
A common problem that occurs during underwriting is not being able to properly verify income. The underwriters must be able to verify your income in order to issue you a loan, but there are times when employers will not respond to these requests or when income levels do not match up with the stated levels on a person's application. A problem like this could cause a delay in getting a loan or the loss of a person's eligibility for a loan.
Old debt that is discovered
Underwriters are also very good at digging up old debts that people have. If they discover an old debt to which you still owe, they will often require proof that you paid it, or they may require that you pay it before they approve a loan for you.
DTI ratio is too high
Another problem that may occur during underwriting involves a person's debt-to-income (DTI) ratio. This ratio refers to the amount of money a person owes in comparison to the amount of money the person earns. If the ratio is too high, the bank may end up denying the loan to you.
The house is not worth enough money
One other issue that can occur involves the appraisal on the house you are trying to buy. If the appraiser finds that the value of the house is lower than the amount the person is paying for the house, the underwriters may deny giving the loan for the original amount the person was trying to pay for the house.
These are just some of the problems that can arise during the underwriting process. Your real estate agent or mortgage broker can give you advice and suggestions if you encounter any type of issue during the underwriting process.
To learn more about homes for sale, reach out to a real estate agent near you.
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